Broker Principal Targets Expansion After Court Win

A Bahamian broker/dealer’s principal yesterday said he plans to double staff to 60-80 persons by year-end, after a New Jersey court dismissed the US government’s securities fraud case against him.

Guy Gentile, head of Swiss-America Securities, told Tribune Business that he was targeting 30 per cent top-line growth for the business in 2017, with Monday’s verdict enabling him to reactivate “stalled” expansion plans.

Disclosing plans to build a Nassau-based broker/dealer that eventually employed 300 persons, Mr Gentile expressed hope that the court’s rejection of the US authorities’ allegations would enable Swiss-America to rebuild relationships with Bahamian commercial banks - all of whom had cut him and the company off as a result of the legal battles.

“It’s a great day for me,” Mr Gentile told Tribune Business about the end of his year-long fight. “I don’t think it’s actually all hit me, but I will tell that when I first heard the news [of the verdict], it was hard to hold back tears for an hour.

“It’s been going on for a year. I didn’t really know how much of a weight it was on my shoulders until I heard. I tried to hold up strong, not let it bother me, because I always knew I was innocent and going to win. Having the victory in my hands, I can’t even put it into words.”

As to the impact on Swiss-America Securities and his other business interests, Mr Gentile said: “We have found a way to survive. All of my businesses are intact.

“We have struggled with a lot of banks pre-judging me and believing I was guilty.... I really had to come up with ways to stay in business and make payroll, as we employ 30-40 people here. The impact on Swiss-America has been struggling with banks.”

With all Bahamas-based commercial banks either severing ties, or unwilling to conduct business with Swiss-America due to Mr Gentile’s legal woes, the broker/dealer was forced to establish banking relationships with overseas providers, increasing the difficulties associated with its financial logistics.

Tribune Business revealed last year how Mr Gentile, a US citizen, was indicted by the federal authorities in March 2016 on criminal charges relating to an alleged securities fraud that occurred between 2007-2009.

He and his Bahamian businesses had subsequently been “forced” to play key roles in undercover ‘sting’ operations targeting criminals earning millions of dollars from market manipulation scams, as the US government leveraged the 2007-2009 case to ensure Mr Gentile became a ‘co-operating witness’.

However, the Swiss-America Securities principal argued that the US federal authorities only resuscitated the 2007-2009 matter after he refused to continue acting as an ‘undercover agent’ for them.

He was forced to spend almost four years in such a role, going ‘above and beyond’ what was required of him in 2012 in return for supposedly having the now-reborn charges against him dropped back then.

Forced to continue playing that role, Mr Gentile yesterday confirmed that he became ‘a kept man’ as far as New Jersey prosecutors were concerned because he was ‘too good’, delivering evidence that resulted in numerous successful prosecutions, jail sentences and multi-million dollar fines against US federal targets.

His work even extended to the ‘bugging’, both by video and sound, of Swiss-America’s head office at Bay Street’s Elizabeth on Bay Plaza in a successful bid to gain evidence against a Canadian fraudster who subsequently pleaded guilty to the charges against him.

In papers associated with his successful bid to dismiss the case, Mr Gentile’ said he was prohibited from ‘selling or transferring’ his ownership interest in Swiss-America Securities to anyone else.

The FBI was especially taken by his ownership of a Bahamian broker/dealer, viewing it as a “mouse trap” that would help draw in the international fraudsters it was targeting.

His other Elizabeth on Bay plaza business, Sur Club Sushi Bar, was also seen by the FBI as a valuable part of the ‘sting’. It was viewed as a location where Mr Gentile could ‘wine and dine’ both its “targets” and those of the Securities & Exchange Commission (SEC).

And Mr Gentile said he also helped train the FBI agents responsible for cracking a $500 million securities fraud and tax evasion scam being operated from Belize.

Among those charged as a result are two Bahamians, Kelvin Leach and Rohn Knowles, who formerly ran the Belize-based broker/dealer, Titan Securities.

The US case against Mr Gentile was dismissed on a legal technicality, as district court judge, Jose Linares, found that the action was effectively ‘out of time’ or estopped under US law.

He agreed with Mr Gentile and his attorneys that the five-year ‘statue of limitations’ was in effect at the time of the alleged securities fraud, meaning that the March 2016 indictment against him was “untimely and must be dismissed”. Judge Linares found the latest date at which the case could have been filed was June 30, 2015.

Mr Gentile yesterday told Tribune Business that “now this is behind me” he was preparing to move forward with expansion plans for Swiss-America Securities that have been in the pipeline for several months.

These include a rebranding and plans to double the broker/dealer’s staff complement from the current 30-40 persons to between 60-80 by year-end.

“My plan, when I came here in 2011, was to build a business with 300 employees, and I plan on still doing that,” Mr Gentile told Tribune Business. “I hired five people last week expecting this to go away, and expect to hire five people every month.

“We expect to increase marketing internationally, and plan to bring in experts to train staff in customer service.”

Mr Gentile said he was also exploring the creation of his own bank in Puerto Rico as a ‘fall back option’ in case he was unable to rebuild Bahamas-based relationships, and also mulling overseas expansion to Europe via a possible London office.

He also indicated that Swiss-America Securities was likely to soon relocate from its current home at the Elizabeth on Bay plaza on east Bay Street, as increased staffing requirements meant it would soon outgrow its existing 3,500 square feet space.

Mr Gentile said the broker/dealer would soon likely require 10,000 square feet, and added: “Since we started we’ve grown at 50-100 per cent a year, with the exception of when this situation was going on.

“That’s the first year, last year, that we did not have growth. It hurt our business but did not crush it, as it grew at the same pace as the prior year.”

Mr Gentile said Swiss-America Securities generated $13-$15 million in revenue for 2016, along with “a very healthy profit margin”.

“We expect this year to have at least 30 per cent [revenue] growth; that’s what we’re anticipating,” he added. “I think we’ll get close to $20 million in revenue this year, and the bottom line should also grow by the same ratio. We expect great things to happen this year.

“Having this behind us will hopefully make it easier for banking partners to do business with us, as they are not going to feel pressure from compliance on this because of the court case. It’s now time for me to get back to work and rebuild some of the banking relationships damaged because of this.”

Mr Gentile added that the verdict also vindicated the decision by the Securities Commission of the Bahamas to take a ‘wait and see’ approach in relation to Swiss-America Securities, seeing how the court case would first play out.